Paris mayor picks fight with Amazon over fast delivery

PARIS — U.S. online retailer Amazon was happily taking over the world city by city — until it crossed paths with Paris Mayor Anne Hidalgo.

Trained in fighting U.S. web giants from previous battles with Airbnb and Uber, the Socialist Hidalgo is taking on Amazon over a fast-delivery service it launched Thursday for residents of Paris and nearby suburbs.

The “Prime Now” service, based out of a vast warehouse in northern Paris, promises to deliver a range of products including fresh food in less than two hours, at prices cheaper than can be found in most stores. Amazon previously launched similar services in the United States, Britain and Italy, as part of a broader foray into traditional retail markets.

But Paris is proving more tricky. In a statement Sunday, Hidalgo argued that Amazon’s approach would “gravely destabilize” Paris’ commercial environment by luring customers away from local stores. Unless Amazon was restricted, her deputy told POLITICO this week, neighborhood shops would be unable to compete on prices, become starved of business and ultimately die out, destroying “commercial diversity.”

“When an actor like Amazon shows up, that does not play by the same rules as everyone else, it messes up the playing field and creates a situation of unfair competition,” said Olivia Polski, in charge of trade at Paris city hall. “We’re not opposed to innovation; we just don’t think it’s fair that Amazon does not have to pay the same social charges as regular businesses.”

Amazon France did not immediately respond to a request for comment.

In one way, Hidalgo has already lost her battle.

As her aide admitted, Amazon did not break any laws by setting up its 4,000-square-meter warehouse within city limits, up against the Boulevard Périphérique ring road. Its fast-delivery service will be available Thursday to “Amazon Prime” customers, come rain or shine. And Polski made no mention of any attempt to ban or even suspend the service’s launch.

But Hidalgo is likely to prove a tenacious adversary. After winning the Paris mayorship in 2014 thanks to a stylish campaign, she has maintained sky-high approval ratings, partly due to a willingness to challenge U.S. firms that many French people consider too nakedly capitalistic.

Web-based firms like Uber, Booking.com and Airbnb are at the top of her hit-list. In the case of the latter company, her action led to stiffer fines against illegal renters, an obligation to pay tourist taxes, and the publication of a map showing all legally rentable residences. (Any flat advertised on Airbnb that is not on the map is, by extension, illegal, and subject to being reported to the police.)

For Amazon, the mayor was working to propose national legislation that could rein in its activity, and planned to talk to the government about the need for such a law.

“Today, we want to move ahead with a regulatory response,” Polski said. “What Amazon is doing is entirely new, and is not covered by our current legislation on competition, so yes, it makes sense to think of new rules.”

At the heart of the dispute is how to define exactly what Amazon is doing. Because the firm defines itself as an online business, not a retailer, it was able to set up its warehouse without having to go through a tricky approval process that normally applies to any business setting up a retail operation in Paris. Polski said that city hall had only been notified Sunday that Amazon was launching its service four days later.

While current rules allow Amazon to skirt retail laws, Hidalgo argues this should not be the case, since its activities compete directly with traditional retailers.

“What we are doing here in Paris [with Amazon] is only the start of a bigger movement,” added Polski. “The rules need to be updated everywhere.”

She did not specify when such legislation might be ready. But with a presidential election less than a year away, France’s Socialist government may well see an interest in defying Amazon sooner rather than later.

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Walter S

LOL, what rules is Amazon not playing by? All that this is doing for Paris customers is lowering prices and increasing living standards as a result. Pollution is also reduced. Anyone who thinks traditional retail businesses are going to be viable over the next 5 or 10 years is fooling themselves, and it’s a good thing if those businesses die out and are replaced by better, more efficient models.

Posted on 6/21/16 | 7:58 PM CET

Par

So Amazon is offering better service to customers then local retail stores and this is somehow “unfair competition”? What planet is the Paris mayor living on?
She should be happy that people of Paris have another option to buy their goods, instead of trying to distort competition by lobbying to create new rules just for Amazon.

Posted on 6/22/16 | 12:24 AM CET

Nuno

@ Walter S

“LOL, what rules is Amazon not playing by?”

Well, Amazon is being investigated in several European countries for tax evasion. Is that enough for you?